Carol Nolan
Ceist:192. Deputy Carol Nolan asked the Minister for Finance the response of his Department to the Ukrainian war crisis; and if he will make a statement on the matter. [13722/22]
Amharc ar fhreagraThursday, 10 March 2022
Ceisteanna (192)
Freagraí scríofa
The Government's response to the Russian invasion of Ukraine is being crafted within the wider European Union response. The sanctions imposed by the European Union, and by many other jurisdictions, are unprecedented, and the Government's view is that these should be as onerous as possible.
The EU autonomous measures place obligations on all Member States and every natural and legal person therein, to give effect to the sanctions that have been adopted. Arising from that, Member States are obligated to put in place effective, proportionate and dissuasive penalties and to take all necessary measures to ensure that the Regulations are enforced. Ireland does this by way of Statutory Instrument and in relation to Ukraine, that function falls to me, as Minister for Finance. The sanctions process cut across many areas of Government and is managed by a Cross Departmental International Sanctions Committee, known as CDISC, which is chaired by the Department of Foreign Affairs.
On the financial front, these include targeted sanctions – including freezing of assets - imposed on many Russian politicians and named individuals. A ban on financial transactions with the Russian Central Bank has also been imposed, while the EU has also agreed a package that has excluded seven Russian banks from the SWIFT payments system. Other measures include a ban on selling, supplying, transferring or exporting euro banknotes to Russia or to any natural or legal person or entity in Russia. Officials from my Department continue to engage with other public sector members and with the private sector to emphasise the need for due diligence in relation to complying with the restrictive measures that have been put in place.
Apart from sanctions, Government has been forceful in providing financial assistance to the people of Ukraine. In my role as Minister for Finance, I am Ireland’s Governor to a number of global and European International Financial Institutions including the World Bank, the IMF, the European Investment Bank and the European Bank for Reconstruction and Development, as well as a number of other regional multilateral development banks. I want to assure the Deputy that Ireland has also been supportive of these Institutions’ evolving response to the situation and of their initiatives to provide support and financial assistance to the government and people of Ukraine.
Furthermore, I attended a Special Informal ECOFIN Meeting, by videoconference on 2 March last, to discuss the economic and financial situation in Ukraine, as well as the consequences of sanctions on European economies. At the meeting, we confirmed the increased financial support to Ukraine under the Macro-financial Assistance Package and agreed to take measures to avoid any circumvention of sanctions. We also noted that the activation of the General Escape Clause - that relates to the suspension of the Stability and Growth Pact - continues to apply in 2022, which will allow for fiscal policy to adjust to the evolving situation. There was unanimous support at the Council for this approach. Ministers will continue to coordinate fully to protect our economies.
Within my Department, the Financial Stability Group, which comprises senior management from the Department of Finance, NTMA and the Central Bank, discussed the Ukrainian crisis at its meeting on 2 March. Arising from that discussion, the Financial Stability Group has established a Working Group made up of officials from the three FSG organisations. This Group will focus on enhanced monitoring of the situation and provide regular updates to FSG members.
I would also point out that IBRC (in Special Liquidation) has assets in both Russia and Ukraine. My officials are in regular contact with the Special Liquidators concerning these assets and are monitoring developments closely. Stock market volatility has impacted the value of our shareholding in Allied Irish Banks, Bank of Ireland and Ptsb. My officials are monitoring the situation in conjunction with our financial advisers and how it may impact the 2 trading plans currently underway and our future realisation strategies.
Finally, I would also point out that Government has taken several measures to limit the fallout from the geopolitical situation on households and firms. Measures include an electricity rebate and a cut in excise duties to mitigate the increase in global energy prices.
In summary, the situation is evolving rapidly and both I and my Department continue to respond accordingly.